If you’re anything like most Virtual Assistants, you likely believe that you can do all your bookkeeping yourself without any knowledge. After all, there is software out there that will ‘do it for you’, and how hard can it really be? But the truth is that this thought can cost VAs a lot of money each year and even cost them their business.
Here are some bookkeeping mistakes that you’ll definitely want to avoid.
Not Doing It
Many VAs avoid bookkeeping and leave it all until the night before their taxes are due. This is a huge mistake for obvious reasons. Even if you are just starting out and your business doesn’t make much money, you could be missing out on benefits if you don’t take bookkeeping seriously. You have to account for and record every penny you earn from all activities, all the time.
Not Saving Your Receipts
Every single receipt must be saved, it doesn’t matter if it’s for $2 or $2,000. It’s easy to save them, put them in a box or file folder after you enter them into your bookkeeping software. That way, if the ‘tax man’ ever has a question, you will have the records.
Taking Money out of the Till
Even though you probably don’t have a real cash drawer, taking out money from your business account and spending it on personal items is a bad way to do business.
Lack of Automation
Today you are able to automate a lot, such as hooking up your PayPal account to your accounting software so the transactions are automatically added. This will help you save time and avoid mistakes.
Not Saving Money for Taxes
Your accounting software lets you know how much you should be setting aside to pay your taxes at tax time. Make sure you are setting that money aside so you have it when it’s time to pay. It’s a good idea to have a savings account specifically for taxes.
Not Hiring an Expert
Even if you don’t want to bring someone on board permanently, at least hire someone to help you set up everything. That way you will have your accounts set up right and be able to develop a process that will save countless hours and dollars.
We are are really lucky to live in the era of technology which helps makes bookkeeping easy. When you realize that bookkeeping is simply keeping track of what goes in and what goes out of your business, it becomes a lot less scary. Bookkeeping is something that cannot be ignored if you want your business to be successful.
Recommended Bookkeeping Software
Wave Apps – Free